1. Barcelona office market
Q2 2011
Quarterly prime rents Annual gross take-up
Source: Savills Research Source: Savills Research
“The market is clearly going through a period of transition, awaiting
for news confirming an economic recovery, which are taking longer
than expected to arrive. When the debt markets stabilise and the
occupier market shows signs of improvement, these will clearly
indicate that the market is prepared for a new cycle and a change in
trend.”
Eusebi Carles (General Manager Barcelona)
During the second quarter of 2011, the gross Rental values have shown a general decrease in
take-up levels remained similar to the previous all areas during the second quarter of the year.
quarter, reaching a total of 64,000 sqm. This While awaiting for the long hoped-for market
figure demonstrates that the market remains weak recovery which would reverse this downward
with another quarter in line with the weakest trend, the progressive stabilization of the vacancy
performance in the past 10 years. rate should at least help maintaining rents at
similar levels to those being currently witnessed.
With regards to supply, the development pipeline
has been reduced significantly until the end of The total investment volume for the first half of the
2012, with only 19,000 sqm of new space coming year shows that investors remain extremely
into the market as available to add to the current cautious with the vast majority remaining inactive.
supply. This will have a positive effect on the The price gap between what prospective buyers
vacancy rate which will start stabilizing following are willing to pay and sellers are looking to
the increase of 8 percentage points seen since achieve remains significant and as a result means
2007. that transactions are not taking place.

2. Economy, demand and supply
Economy Demand continues to mainly come from companies
relocating and/or restructuring their processes and who
The global economy continues to be shaken by never- are looking for more efficient and modern space,
ending political contention and strong financial volatility enabling them to reduce costs, while others are making
on both sides of the Atlantic. The absence of a political the most of the situation to renegotiate contracts with
agreement with regards to the problems in Greece has their current owners.
rocked the foundations of the European Union and is
causing the risk premiums of periphery countries to There is still an irrefutable leader when it comes to
reach record highs, which is putting risk at significantly CBD versus New Business Areas. Over the first half of
high levels for countries the size of Italy or Spain. the year, more than 66% of transactions over 1,000
sqm were signed in the New Business Areas, with
Following the rescue package agreement for Greece in Plaça Europa being a clear example of how succesful
mid July, both countries have come into focus for the marketing can be in difficult times. Grupo Puig is one
cost of their debt, which following an upward surge of the occupiers which have chosen to locate their
reached a record high in early August over 400 basis headquarters in this strategic area - CatalunyaCaixa
points above the cost of German bonds. will build a turn-key project of over 14,300 sqm for
them. In addition, the pharmaceutical company Ipsen
Long term government bond yields (10 years) Pharma and the insurance company DAS chose the
Realia BCN Tower to locate their headquarters in
Catalonia, and MRW will construct their future
headquarters of over 6,500 sqm nearby.
However, two important transactions have also taken
place in the prime area this quarter, which indicates
that location is still a strategic and essential option for
some companies, such as Black Lion and Kraft Foods
which have chosen to locate their office in l’Illa
Diagonal.
Supply and vacancy rate
Barcelona’s office stock is beginning to stabilise at
around 5.6 million sqm with a vacancy rate at the end
of June of 13.2%.
Source: Eurostat
Annual change in the vacancy rate
Taking the above into account, Spanish citizens are
continuining to suffer from a sluggish job market,
although the beginning of the summer season helped
to reduce unemployment for four consecutive months
and unemployment fell by 193,500 at the end of July.
Inflation has also provided some respite for personal
budgets - it was 3,1% in July, which is one tenth of a
percent below June’s figure and has fallen for the third
consecutive month.
The letting market
Demand and take-up
The Barcelona office market remains at a constant in
terms of market activity, but it is still not showing signs Source: Savills Research
of being able to exceed the psychological 350,000 sqm
take-up limit by the end of the year (this figure relates The upturn in vacancy which has been evident since
to annual average for the past 10 years); which would 2007 is starting to slow as a result of a considerable
permit that a certain dynamism would return to the decline in the construction of new projects, but we do
market. not expect this figure to decline in the short-term given
that net take-up is still negative (companies which are
Take-up in the second quarter of 2011 reached 64,000
already present in the city are letting smaller spaces,
sqm, which shows a 5% decline compared to the
compared to the ones they have left and there are not
previous quarter. However, take-up increased by 26%
enough new companies setting up or moving to
year-on-year. As a result, we end the first half of the
Barcelona).
year with gross take-up totalling 132,000 sqm.
Barcelona office market -Q2 2011 2

3. Rents & investment market
The lack of new available office projects, which we The investment market
anticipated in previous reports, is now a fact. The
completion of the Catalana Parc Business Park, which Uncertainty is undoubtedly one of the worst, if not the
is owned by Catalana Occidente in Sant Cugat del worst travelling companions for investors. It makes
Vallès, is the last significant project to come on to the investors even more cautious, which then voncerts in
market in the next 18 months. to over pessimistic forecasts and then transactions end
up being abandoned at the onset or very conservative
The development pipeline until the end of 2012 will
offers are made which do not match the values that
mainly consist of small projects and building
vendors are willing to accept.
refurbishments in the city centre, which will be drip fed
onto the market, as well as turn-key projects for
corporate buildings, amounting a total of 67,000 sqm. Annual investment volume
Some of these projects are:
VidraFoc’s 4,500 sqm headquarters in
22@/Poblenou.
Desigual’s headquarter in Nova Bocana, comprised
of two buildings of more than 10,000 sqm each.
Col·legi d’Economistes de Catalunya 10,000 sqm
headquarters in Plaça Gal·la Placídia.
Fundació Pascual Maragall’s headquarters of more
than 10,000 sqm, which is also located in Nova
Bocana.
Vacancy rate by sub-markets
Source: Savills Research
This gap between buyers and sellers’ perception of the
value assets, has gripped the investment market over
the first half of 2011 like never before. This has
materialised into a total office investment volume of
€156 million and an annualized figure of €422 million,
which is one of the lowest recorded over the last
decade.
Having said this, only 27% of this relates to traditional
investment transactions; the rest have been hotel
change of use transactions, disposals from financial
institutions or owner-occupier purchases.
This level of activity, unusually low, will stabilise and
Source: Savills Research minimum comfort levels will be re-established together
with macroeconomic climate and when the market will
start showing the first subliminal messages of recovery
Rents with a more robust occupier market as a result of
Rental values which had remained stable in recent adequate and sustained GDP growth.
quarters have declined between April and June. Prime
rents have fallen for the second consecutive quarter by
2.5% to 19€/sqm/month, whilst in other areas rents
have fallen between 2.7% and 5.5%. The city centre
has been the most affected.
We expect rents to gradually stabilise as they have
almost bottomed out, but owners will continue to
reward occupiers with considerable incentive packages
in order to retain tenants who respond to their security
and solvency requirements.
Barcelona office market - Q2 2011 3

4. Barcelona office market
Survey map
For further information, please contact:
Eusebi Carles Frédéric Stravraky Josep Garcia Andrew Stevens Muna Benthami Eri Mitsostergiou
Director Barcelona Agency Office Corporate Valuations Research Barcelona Research Europe
+34 93 272 4100 +34 93 272 4100 +34 93 272 4100 +34 93 272 4100 +34 93 272 4100 +31 (0)20 301 2087
ecarles@savills.es fstavraky@savills.es jgarcia@savills.es astevens@savills.es mbenthami@savills.es emitso@savills.com
Savills is a leading global real estate service provider listed on the London Stock Exchange. The company established in 1855, has a rich heritage
with unrivalled growth. It is a company that leads rather than follows, and now has over 180 offices and associates throughout the Americas, Europe,
Asia Pacific, Africa and the Middle East. A unique combination of sector knowledge and entrepreneurial flair give clients access to real estate
expertise of the highest calibre. We are regarded as an innovative-thinking organisation backed up with excellent negotiating skills. Savills chooses
to focus on a defined set of clients, therefore offering a premium service to organisations with whom we share a common goal. Savills takes a long-
term view to real estate and works hard to invest in long term and strategic relationships and is synonymous with a high quality service offering and
a premium brand.
This bulletin is for general informative purposes only. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever
for any direct or consequential loss arising from its use. The bulletin is strictly copyright and reproduction of the whole or part of it in any form is
prohibited without written permission from Savills Research. (c) Savills Ltd August 2011